Port Harcourt, Other Refineries, Will Save Naira From Depreciation— CPPE
The Centre for the Promotion of Private Enterprise (CPPE) has projected a stable exchange rate and moderation of inflation following monetary policy tweaks of the Central Bank of Nigeria (CBN) , the Port Harcourt Refinery, which was restreamed by the Nigerian National Petroleum Company Ltd (NNPC) and the Dangote Refinery.
The Chief Executive Officer of the CPPE, Muda Yusuf made these comments in his 2025 outlook for Nigeria, sent to THE WHISTLER.
Yusuf who was the former Director General of the Lagos Chamber of Commerce and Industry noted improvement in exchange rate stability follwoing key monetary reforms.
Yusuf the said that the Nigerian economy exhibited resilience on account of GDP performance.
Nigeria’s GDP grew by 2.98 per cent in the first quarter, 3.19 per cent in the second quarter and 3.46 per cent in the third quarter.
He projected that the GDP may close the year at about 3.6 per cent.
Reviewing Nigeria’s foreign exchange ecosystem, the CPPE boss said as of the close of the year, official exchange rate at Nigerian Foreign Exchange Market (NAFEM) was N1,537 up from an average of N1,455.59 in January 2024 and N907.1 in December 2023.
He said “From July to December 2024, the rate had largely stabilized. The moderation in exchange rate volatility was informed by the series of regulatory reforms and the periodic intervention by the Central Bank in the forex market.
“Meanwhile, the balance of outlook for the exchange rate in 2025 is on the upside based on the following expectations: Sustained improvement in foreign reserves which is currently in excess of $40bn.
“Improvement in accretion to reserves on the back of improved inflows from the IMTOs and diaspora remittances. Improved capacity of the CBN to moderate rate volatility through periodic intervention in the forex market.”
Other factors he highlighted are the positive impact of the $2bn Euro Bond proceeds on reserves as well as the positive Impact of the successful domestic dollar bond of $500m.
He also noted the “Import substitution effect of the Dangote and Port Harcourt refineries with the consequential easing of demand pressure on the forex market.”
On inflation, Yusuf said inflation may moderate slightly on the expected reduction of the volatility of the exchange rate and possible rebound of the naira.
He highlighted the possible moderation in energy cost as the geopolitical tension eases as a result of the impact of Donald Trump’s presidency.
He said, “There is a likely boost in global oil production as USA increases production and the embargo Russia eases. These are likely outcomes of Trumps presidency.
“There is also the factor of the base effect on the inflation numbers as inflation was generally elevated in 2024.”
He said some key drivers of inflation may not completely dissipate in 2025.
According to him, high energy cost including electricity tariff, exchange rate and transportation cost may not abate completely.
Port Harcourt, Other Refineries, Will Save Naira From Depreciation— CPPE is first published on The Whistler Newspaper
